The Potential of Public-Voluntary Partnerships for the Delivery of Quality Social Services

[Written with Frank Allen]

Published in:  Special Issue of ‘Studies’, Winter 2002 on ‘Racism & Community’.

text version follows:


A commitment to meaningful partnership between different social groups has become a central plank in Irish public policy and is generally thought to have contributed to greater economic prosperity and a less adversarial approach to achieving shared goals.  Institutional forms of partnership such as in the Partnership for Prosperity and Fairness (PPF) and Public-Private Partnerships (PPPs) are central elements of the National Development Plan 2000-2006.  In these new structures, the definition and scope of social partnership has been extended beyond the traditional wage negotiations among business, trade union and farmer representatives with the Government acting as facilitator.  In particular, the voluntary sector is now officially regarded as one of the key pillars of social partnership, to give voice to the concerns of unemployed, disabled and other disadvantaged citizens.

While formal recognition of the voluntary sector’s distinctive voice in contributing to public policy is relatively new, the Government’s willingness to delegate responsibility for the delivery of essential social services to voluntary groups is well-established.  It is fair to say that the Government, and indeed society at large, has not adequately remunerated the voluntary sector or worked with it as a partner in striving to attain critical social goals.  With the contribution of the voluntary sector in the policy area now firmly established, it is timely to consider how structures to encourage and reward genuine partnership at the grass-roots level could also be developed.

In the capital infrastructure area, a consensus has emerged that PPPs are an appropriate mechanism for the delivery of projects that would traditionally be seen as the sole responsibility of the public sector.  Projects are now underway to award long-term concessions to private operators to design, build, and maintain infrastructure projects including schools, roads and waste-water treatment plants.  It is argued that bringing together the state and private parties in formal relationships results in greater innovation in the design of projects, more long-term commitment and greater clarity about the respective roles of the parties paying for and delivering specified services.

The goals of PPPs in capital infrastructure are no less relevant in delivering ‘soft’ public services such as in health, education and community services.  Voluntary bodies who have long been responsible for meeting some of the most challenging community needs in inner cities may wonder what is new about private agencies designing and implementing projects to meet needs that have not been adequately addressed by the State.  Most voluntary organisations express satisfaction with the level of financial support that the State has provided for projects in recent years but are less pleased with the process involved and with the period of commitment.  Few private sector operators would accept the type of ad hoc arrangements or haphazard evaluation processes the State often subjects volunteer groups to when funds are sought for projects of real public benefit.  Is it time for voluntary bodies to seek a partnership process that adequately compensates them for their contribution and enhances their capability to deliver services in the most professional manner?

The purpose of this article is to argue that voluntary agencies that deliver public services and State agencies that fund them should consider entering into formal agreements similar to those now being negotiated with private parties in the case of capital infrastructure projects.  A clear benefit would accrue from the negotiation process where both parties would be required to clarify their respective goals and responsibilities relating to the contracted services.  During the implementation phase, the voluntary agency could concentrate on providing the service itself and not have to worry about repeated applications for funding subject to the uncertainty of continued support.  From the State’s perspective, it gets a deliverer ‘close to the action’ and a clear benchmark against which the performance of the voluntary agency can be measured.  As long as original commitments are being honoured, the State agency has the assurance that the service is being provided properly over the period of the agreement.  Such Public-Voluntary Partnerships (PVPs), as we label them, would bring the benefits of innovation, flexibility and long-term planning to the voluntary sector widely recognized as beneficial in the provision of capital infrastructure by the private sector.


How PPPs Work

The basic idea behind a PPP is that while the public sector retains ultimate responsibility for providing a service, actual delivery becomes the responsibility of a private party under a long-term agreement or ‘concession’.  The concessionaire builds a project on behalf of the State and is paid by means of performance payments over a lengthy period.  As a result, the emphasis switches to measuring and rewarding superior performance rather than ownership of assets.  As an example, the Department of Education and Science has granted a concession to a company to build five new second-level schools in Dunmanway, Shannon, Clones, Ballincollig and Tubercurry.  The Concessionaire is responsible for designing the school buildings within requirements set out by the Department.  It will then maintain the schools for a 25-year period and be responsible, at its own expense, for maintenance, painting, landscaping and general upkeep.  The Department will retain ownership of the assets at all times and will pay the Concessionaire a semi-annual fee to recover the cost of construction and maintenance over the concession period.  The level of these fees was established by competitive tender in 2000 and will be adjusted only for inflation or if the Department changes the definition of requirements as set out in the concession.  If the schools show physical defects at any stage over 25 years, either because of poor design or inadequate maintenance, the performance fees paid to the Concessionaire will be deducted.  If performance penalties exceed an agreed level, the Department will be free to terminate the contract and seek to replace the concessionaire for the unexpired period of the concession.  This PPP structure creates a clear incentive for the private party to design and maintain the buildings to the highest levels.  It gives the Department assurances about the quality of accommodation over 25 years, for the schools in question.  Lastly, it allows teachers and school management to concentrate on the educational aspects of their work rather than lobbying local politicians to secure funding for replacing broken windows and the like.

Contrast the clear definition of responsibilities and long-term planning involved with building these five schools through PPP contracts with the more ad hoc arrangements that a voluntary agency is likely to face if it seeks Department of Education support for child-care facilities for refugees and asylum-seekers.  Usually the project would have begun on the voluntary agency’s own initiative and in borrowed premises.  The Department may recognise the promoters’ commitment in initiating a worthwhile project and would be receptive to requests for financial support.  It is likely however that actual commitment of cash support would be on a year-to-year basis and may not be confirmed until very close to the beginning of the school year.  The experience of voluntary agencies is that the decision-making period is not characterised by detailed negotiations about the design of the project resulting in agreement on the specific objectives to be achieved.  On that basis the promoters would have a clear indication of Government policy relating to the area of need and could further develop that or other projects accordingly.  Rather, Government Departments tend to make decisions on when to grant support to a project and wait for another application a year later.  As the agencies are generally pleased to receive the funding and are certainly not asking for Departmental inspectors to come and measure their performance, this system of financing is regarded as acceptable to all parties.  Its limitations are that it does not encourage genuine partnership between public and voluntary parties in designing and implementing projects and it does little to foster best practice in meeting educational and other needs.

The concept of PPPs is relatively new to Ireland but is well developed internationally, particularly in the UK where they have been used longest and where most commentators appear convinced that they represent good value for money and stimulate innovation.  Hundreds of contracts have been signed across a wide range of sectors such as transport, hospitals, prisons, water treatment facilities and schools (Infrastructure Journal, 2000).  Similarly in continental Europe, PPP projects are commonplace.  Examples include a high-speed rail project to connect Amsterdam with Antwerp and a comprehensive road building programme in Portugal.  In Ireland, under the National Development Plan, provision has been made for PPP funding in roads, waste management, public transport and water services.

The perceived benefits of PPPs over traditional procurement approaches are that the private sector guided by the profit motive is more innovative and cost-effective in the provision of public services.  By transferring risk (and correspondingly, reward) to the private sector, PPPs ensure that issues like design and construction will take the ‘whole life’ of the asset into account.  The public gains access to a range of private sector skills that lead to more flexibility, responsibility and higher quality provision of services.  Incentives are created that lead to greater efficiency since payment is tied to performance throughout the life of the contract.

Current Debate on PPPs

There are limitations in the use of PPPs.  For instance, an initial learning curve means that it often takes a long time to establish proper structures and to negotiate individual deals.  PPPs also sometimes fail to deliver value for money since public sector personnel find it difficult to manage and implement the difficult process involved.  This may be because their experience is in defining policy rather than in supervising detailed operations.  Projects in the area of information technology have posed particular problems since it is difficult in the case of unproven technology to write contracts outlining exactly where responsibilities between each party lie.  Even with these limitations, the evidence on PPPs is generally positive and they undoubtedly offer significant potential for the public sector to deliver a range of quality services in innovative, less expensive and more exciting ways.

The use of the private sector in the delivery of health and education services is now well established in the UK.  The National Health Service (NHS) buys more than £1.2bn of care a year from the private and voluntary sectors (Financial Times, June 26, 2001).  Over twenty local education authorities have contracted out, or are contracting out, their school management services.  To date, however, a distinction has been made between core and ancillary services.  There is, for example, hardly any private sector involvement in school teaching, regarded as a core education activity whereas the education and training of prisoners is allowed since this is viewed as an ancillary activity to the core aim of detaining offenders.  Similarly, while managing hospitals using a PPP structure is common, the UK Government has ruled out allowing the private sector to provide clinical services or employ clinical staff such as doctors and nurses in current plans for privately managed fast-track surgery centres.

This too may be changing although private involvement is moving more rapidly in education than in health services.  An influential UK think-tank, The Institute for Public Policy and Research (IPPR), argues in a recent report that the private sector should be allowed to provide almost any public service from teaching to hospital care (IPPR, 2001).  There is, it says “no coherent rationale“ for the different types of services that are currently provided privately and those regarded as off-limits.  It argues that the government should promote greater diversity of provision, whether by public, private or voluntary deliverers.  This would permit, for instance, one public sector body to sell its skills to another public sector body.  For the voluntary sector, it could mean that the State might commission key social services from sources there rather than provide these services themselves.  In Ireland, the range of areas that PPP projects cover is expanding rapidly.  Initially most were in roads, water treatment and waste management but recent initiatives in the area of education, social and mixed housing development indicate an increased realisation of how a broad range of welfare objectives can be achieved through a PPP approach.

While the issue of PPPs may occasionally be controversial in the UK, at least it is the subject of debate among the social partners.  There is acceptance that this partnership model makes sense in certain sectors and the issue often boils down to how the rewards and risks should be shared among the parties.  In Ireland this debate has not yet started and the State may be missing exciting opportunities to help it achieve social policy objectives in an effective manner.


Is the Situation Sustainable?

There are many examples of social services in Ireland, especially in the areas of addiction, homelessness and social deprivation that are being provided by voluntary agencies and religious orders.  The implications for those in need would be catastrophic should the Simon Community, the Society of St. Vincent de Paul and the Salvation Army withdraw from providing accommodation for homeless people.  With a few notable exceptions, work is now being done by paid staff, supplemented by volunteers or with a volunteer board.  Some services are highly dependent on an increasingly aged cohort of individuals in religious orders who attempt to satisfy a patchwork of needs by acting in an unofficial capacity as surrogates of the State.  The current situation may not be sustainable since as membership in these orders declines, they will have to withdraw more and more from the direct provision of these essential services.  This, in fact, has been happening over recent decades as nuns, for instance, enter retirement age.

We do not intend to imply that there is only a meaningful role for religious or voluntary organisations where there is failure by the State to fulfil its obligations.  In essence, their role is valuable in itself since the dignity of humans is enhanced and the bonds of community strengthened when individuals are willing to contribute to others’ welfare for no monetary reward.  Nor should the approach we take be seen as criticism of the dedication of many public sector employees.  Rather, we believe the roles of the public and voluntary sectors are complementary and that both parties would benefit immeasurably if new forms of partnership were created that would permit a longer term perspective than is the case at present.

Ultimate responsibility for these services could properly be regarded as resting with the State which has been receiving them ‘on the cheap’ through these intermediaries.  Yet their critical role is rarely recognized in the level and nature of State support.  They lack funding security, relying on voluntary subscriptions and special promotional campaigns to bolster their resources.  Financial allocations by the State are often determined in a manner that relies on the political skills, maneuvering and contacts of the organizations’ executives.  From the State’s perspective, by funding voluntary groups in this way, it does not get the degree of oversight that would be reasonable considering the level of funding provided.  There is seldom a direct link, moreover, between the operations of a voluntary group and the mission of the funding State social services agency.   Rather than seeing voluntary groups as strategic allies or partners in tackling issues of public need, the State itself sometimes duplicates the same service.  A fresh approach to partnership with the voluntary sector could offer an infusion of new blood, perspectives and operating methods.  Public-Voluntary Partnerships or PVPs that draw from experience to-date of PPPs suggest an exciting approach with enormous potential.


Structuring a PVP

PPPs, for provision of physical infrastructure, are designed to encourage innovative design, reward performance according to the results achieved, and adopt a long-term perspective.  All these can best be achieved by private developers striving to earn a long-term return.  PVPs can similarly be structured but in this case to encourage innovative solutions to social problems from people who have most relevant grass-roots experience.  PVPs would recognise the existing long-term commitment to the individuals and communities being served.  The ethos of voluntary agencies is to show dedication to the people being served that goes far beyond what could reasonably be expected from paid employees.  Nevertheless, the conceptual framework underlying PPPs and their development to-date offers a wonderful opportunity to those engaged in social ventures to learn and apply in the case of the embryonic PVP structures.

A good place to explore how PVPs might operate in practice is a report commissioned by the Department of the Environment and Local Government (2000).  This envisages different models of partnership to meet specific needs and contains general guidance with regard to the selection of projects, the management of the process and other actions to facilitate implementation.  It presents a Route Map on the main stages in the development and implementation of a PPP, including project identification, appraisal, management, stakeholder consultation, the tendering process and performance measurement.

This development of a comprehensive set of procedures would provide an ideal learning tool for State agencies contemplating PVPs.  These obviously face a different set of circumstance reflected in their remit, operational needs, public demand and indicators of performance.  A PVP would be founded on the principle that a project consistent with the mission of the State agency be identified and an output specification determined.  Then, to achieve value for money, a competitive process ideally involving a number of voluntary or community groups would set in train.  Some groups might even co-operate, build consortia or involve private sectors partners with special expertise in particular aspects of the work.  Once negotiations are completed and the winning bid is determined, a detailed partnership process would be put in place embedded in a legal contract containing such items as performance indicators and payment terms.  Just as in PPPs, the winning bid may not necessarily be the lowest cost but the proposal that offers the best value in meeting the State’s objectives over the long term.

The delivery of education and health services to Travellers provide examples of how the above could operate in practice.  The State might set as performance criteria the percentage of Traveller children of a certain age who remain in school, their educational achievement or the reduction in the drop-out rate over a number of years.  For health services, in order to close the gap between the Traveller community and those with a corresponding income in the general community, performance criteria might include the actual take-up as well the quality, geographical spread and range of services provided.

An explicit link between the amount of funds allocated by the State and quantifiable targets would be set on an ex ante basis.  The contract with the voluntary agency would define the time period for the programme, probably not less than five years, be renewable should certain targets be met but also have scope for termination if minimum objectives are not being achieved.  Along the way, a series of milestones or progress reports would be required so that a sense of working together to achieve shared goals, and indeed the discipline that comes from striving to meet targets, should ensure the programme remains on track.

The great advantage of the above process, as opposed to the present top-down approach is that it gives both the State and the voluntary group ‘ownership’ which helps build a working partnership that is sensitive to developments on the ground.  Rather than losing touch over time, the voluntary group is likely to maintain a continuing capacity for adjustment, innovation and renewal associated with changes in local demand for its services.



The healthy condition of the State’s coffers in recent years meant there has been little concern about the availability of resources for voluntary sector activities.  The real dilemma for those involved in the sector has been that the cash received has been provided on an ad hoc or short-term basis and no long-term planning or agreement of objectives takes place.  In particular, little strategic discussion or analysis has been conducted regarding which tasks are best handled by the State and which should fall within the remit of the voluntary sector.

The use of PVPs offers hope that the manner in which different aspects of work in the social arena might be conducted in the future will change in fundamental ways.  As the table over illustrates, the proper design of PVPs could lead to the development of clearly defined, agreed and shared policy objectives resulting in a dynamic and performance-related culture in voluntary organizations.


Aspect of Work Traditional Approach Public-Voluntary Partnerships
Development of Policy Objectives Not explicit but largely shared Defined, agreed and shared
Performance Measurement Little Detailed
Medium-Term Commitment or Security Little Clear
Structures or Incentives to Develop Professional Excellence and Innovation Little Clear
Financial Payment Current operating costs of project Sufficient to provide for professional development (e.g., training of volunteers) and pensions

The absence of a spirit of partnership means that the appropriate discipline that accompanies the setting of joint goals and operating in tandem is often not present.  Moreover, the State as it gets more experience of the PVP model, can use it to tackle the most challenging and resource-hungry social endeavors, such as night shelters catering for chronic drug abusers.  A criticism often levied at voluntary organizations is that they shy away from the most difficult projects, leaving the State ‘carrying the can’.  Under a properly functioning PVP approach, even such ‘hard cases’ can be properly funded leading to the provision of an appropriate level of quality professional services.



The common good demands that we find new explanatory models, forms of cooperation, and indeed of language itself, to help build social cohesion in Ireland today (Riordan, 1996).  The reduction in the number of people prepared to devote their time to voluntary and community activities is of real concern.  Yet much of the most exciting research in politics and economics in recent years is based on the realisation that human behaviour is not motivated exclusively by material self-interest.  Charity, altruism and volunteerism testify to the key roles that emotions, trust and commitment play in community life (Frank, 1988 & Ridley, 1997).

Transparent, competitive and accountable procedures consistent with overall social policy point the way for harnessing the enthusiasm and commitment of volunteers, the pragmatism of the marketplace and the responsibilities of the State in responding to a wide range of social service needs.  There is a need for a new vision of how the State, private and voluntary/community sectors can work together as partners to enhance the concept of civil society in Ireland.  The debate has until now, however, largely taken place at a macro level addressing issues such how social partnership should work or how the benefits of a booming economy can be shared among the different social partners (Reynolds and Healy, 1999).  While discussion on these issues is necessary and invigorating, for those at the coal-face practical innovations that properly finance, regulate and support charities may prove more fruitful.

The real challenge is to develop appropriate structures such as PVPs to provide guidance to voluntary agencies so they can concentrate on their underlying mission and achieve results.  The State in turn can provide the type of financial incentives and regulatory framework it uses to stimulate private initiative in other activities.  A real opportunity now exists to create in Ireland a spirit of social entrepreneurship and activities as rich and as fruitful to society as is now credited to entrepreneurs engaged in private sector endeavours.

Frank Allen works in infrastructure finance in the International Financial Services Centre, Dublin and Finbarr Bradley is a former Professor of Finance at Dublin City University (DCU).



Department of the Environment & Local Government (2000), ‘A Policy Framework for Public Private Partnerships’, Report by PriceWaterhouseCoopers, 14 April.

Frank, Robert H. (1988), ‘Passion within Reason: The Strategic Role of the Emotions’, W.W. Norton.

Institute for Public Policy Research (2001), ‘Building Better Partnerships’, Final Report of the Commission on Public Private Partnerships, June.

PFI Statistics: Signed Deals in the UK (2000),  Infrastructure Journal, November.

Reynolds, Brigid & Sean Healy (1999), ‘Social Partnership ina New Century’, CORI Justice Commission, March.

Riordan, Patrick S.J. (1996), ‘A Politics of the Common Good’, Institute of Public Administration.

Ridley, Matt (1997), ‘ The Origins of Virtue’, Penguin.